International Monetary Fund, the fulcrum of world economic activity, enlightens us on the ever-changing world economic scene with its periodical reports. Its report on the above subject for July 2022 is reproduced below for expert’s reference. Let me explain in a simple way the present economic scene, otherwise.
“Gloomy and more uncertain” is the expert cry from IMF. But we are all aware that the nuances are in the details:
How have the nations performed with their economic growth under the stressing situations?
Discussion
There has been a sudden fall in projected GDP among the nations during 2022 and 2023. While the whole world has shown an inclination towards a downfall, India has somehow indicated a saving grace of a growth of 6.1 in 2023 from 7.4 in 2022.
What about bond yields?
Rising real rates have resulted in higher bond yields in advanced countries while lower market-based measures of inflation expectations have helped to lower some of them.
What are the sectors showing sharp decline in equity markets?
What are the prescriptions as suggested by IMF to tackle the current incoherent economic scene?
Tightening of money supply to stabilize the price increase, taking steps to provide food grains to less developed economies who now feel the pinch of non- availability of even foodgrains to sustain living, recovery of Chinese pandemic levels, and normalcy in supply chains to improve movement of goods
What are the SDR of 122,642.5 amounting to US$170,570.29 Million going to help and for whom due to COVID 19 and sudden gloomy international scene? All from IMF, of course.
Asia and Pacific – SDR 1890.02 US $ 2622.78 Million
Europe – SDR – 4819.1 US $ 6676
Middle East and Central Asia SDR 12312 US $ 17021
Sub Saharan Africa SDR 18551 US$25934
Western Hemisphere SDR 85069 US $ 118,315 Million.
Debt Relief total: SDR 689 US $ 965.
Now, let us discuss India and its neighbors.
India on an emergency scale extended billions of dollars to Sri Lanka, the worst affected, Bangla Dash, a substantial line of credit to meet the liquidity needs and Myanmar its frequent monetary needs on a consistent basis.
Pakistan and Bangla Dash approached IMF for their needs among others.
Overall, IMF is making available nearly $ 250 billion to meet the requirements of its member countries.
What about India and its wherewithal after COVID 19 and economic upheaval?
Both Indian government with nearly 220 Crores of vaccine for its population and liberal food/financial assistance to its population, and the regulatory authorities like RBI/SEBI and others worked overtime to provide the required liquidity. Recent stepping up of monetary rates in tune with the central banks of the world was to contain inflation which has raised its ugly head again affecting vast sections of population who are trying to raise their heads after the horrific COVID 19.
Surprisingly, the whole world expects India to produce miracles and achieve great economic performance to enhance the global economic growth.
My observations
Beyond anyone’s calculations, India achieved the unique vaccination to its huge population almost at free of cost, enabled the poor to get at least food grains and other necessities almost free of cost for its poorer section of the population, and the Central government schemes to help the poor are reaching the nook and corner of the nation. Share market has shown vicissitudes of its movements unravelling unknown potential of money making for risk taking equity or debt holders. With many Indians ranking among the richest of the world due to heavy capitalization of their companies is a breather to the vast masses with the message that India has one of its brightest innings yet to convene to meet the national goals.
I am extremely happy to conclude my discussions on a happier frame of mind.
Source: https://www.imf.org/en/Publications/WEO/Issues/2022/07/26/world-economic-outlook-update-july-2022
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